AI Disruption Causes Major Market Sell-Off
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Feb 28 2026
0mins
Source: Fool
- Market Panic Intensifies: On February 23, 2023, a major sell-off occurred due to fears about AI's potential impact on companies and the economy, particularly hitting tech stocks hard, with IBM shares plummeting 13%, marking its worst single-day loss since 2000.
- Unemployment Rate Warning: Citrini Research issued a report predicting that in two years, AI-induced job displacement could push the unemployment rate above 10%, which spooked the markets and led to a 1% drop in the S&P 500 index on the same day.
- Investors Shift to HALO Stocks: In light of growing concerns about AI's impact, investors are increasingly seeking HALO stocks, which are deemed less vulnerable to AI disruption and may even benefit from the efficiencies AI can provide.
- Examples of HALO Stocks: HALO stocks mentioned by Josh Brown include ExxonMobil, McDonald's, FedEx, Coca-Cola, Caterpillar, and Deere, all of which are considered less susceptible to AI replacement due to their heavy asset bases and have outperformed IBM and other tech stocks in 2023.
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Analyst Views on XOM
Wall Street analysts forecast XOM stock price to fall
19 Analyst Rating
12 Buy
7 Hold
0 Sell
Moderate Buy
Current: 150.440
Low
114.00
Averages
132.17
High
158.00
Current: 150.440
Low
114.00
Averages
132.17
High
158.00
About XOM
Exxon Mobil Corporation is an energy provider and chemical manufacturer. The Company’s principal business involves exploration for, and production of, crude oil and natural gas; the manufacture, trade, transport and sale of crude oil, natural gas, petroleum products, petrochemicals and a wide variety of specialty products; and pursuit of lower-emission and other new business opportunities, including carbon capture and storage, hydrogen, lower-emission fuels, Proxxima systems, carbon materials, and lithium. Its Upstream segment explores for and produces crude oil and natural gas. The Energy Products, Chemical Products, and Specialty Products segments manufacture and sell petroleum products and petrochemicals. Energy Products segment includes fuels, aromatics, and catalysts and licensing. Chemical Products segment consists of olefins, polyolefins, and intermediates. Specialty Products segment includes finished lubricants, basestocks and waxes, synthetics, and elastomers and resins.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Gas Price Surge: Gas prices in Los Angeles have risen over 60 cents in a month according to AAA, creating economic pressure on voters that could impact GOP performance in the upcoming elections.
- Political Dilemma: Republican House leaders are meeting in Miami to strategize legislative agendas amidst high gas prices, although they express support for President Trump's optimistic outlook on the conflict.
- Voter Concerns: Polls indicate that about 29% of Americans approve of the war in Iran, while a majority expect gas prices to continue rising, presenting a significant political challenge for Republicans.
- Energy Policy Debate: Representative Brett Guthrie emphasizes the need to explain the rationale behind the Iran war to help the public understand the strategic reasons for high gas prices, despite widespread voter dissatisfaction.
See More
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- Energy Stock Decline: U.S. energy stocks fell broadly on Tuesday, with Exxon Mobil (XOM) down about 1%, as President Trump suggested that the conflict with Iran could end quickly, indicating a loss of investor confidence in energy equities.
- Oil Price Fluctuations: Trump attributed recent oil price increases to tensions in the Middle East, and a swift resolution could alleviate market pressure, negatively impacting U.S. energy stocks in the process.
- Military Deployment: U.S. Navy ships have been assigned to safeguard oil exports from the Middle East, with Trump indicating that additional strikes on critical infrastructure could occur if Iran does not surrender, adding to market uncertainty.
- Investor Sentiment: While Trump's comments may have led investors to hope for a quick resolution, Iranian officials have not signaled any intention to back down, prompting market analysts to suggest that this has led investors to trim energy positions due to concerns about future developments.
See More
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- Market Volatility Surge: The global conflict between Israel and the U.S. against Iran has caused the Chicago Board Options Exchange Volatility Index (VIX) to soar to 31, more than doubling since early 2026, indicating heightened uncertainty and panic in the market that could undermine investor confidence.
- Palantir's Growth: Palantir Technologies saw its U.S. commercial revenue grow by 109% in 2025 to $1.46 billion, showcasing its dual market potential in military and commercial sectors, particularly with its aggressive marketing of AI platforms, enhancing its competitive edge in future markets.
- ExxonMobil's Profitability: Despite a decline in overall revenue to $323.9 billion, ExxonMobil generated $28.8 billion in earnings and $52 billion in cash flow in 2025, demonstrating its robust profitability amid oil price fluctuations, especially following a 50% rise due to the ongoing conflict.
- Oil Price Impact Analysis: With the Iran conflict pushing oil prices above $100 per barrel, ExxonMobil's upstream revenue reached $11.3 billion in Q2 2022, highlighting its strong earnings potential in high oil price environments, and it is expected to leverage short-term profits to support long-term growth.
See More
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- Funding Controversy: Democratic senators expressed strong opposition to President Trump's upcoming supplemental funding request for the Iran war, with Senator Warren stating a firm 'no' on additional funding, highlighting Congress's power to halt such actions and reflecting deep concerns over the war's continuation.
- Escalating War Costs: Reports indicate that U.S. military operations burned through $5.6 billion in munitions within the first two days, with estimated costs reaching approximately $891 million per day, which not only exacerbates fiscal burdens but also risks market volatility and soaring oil prices, impacting economic stability.
- Lack of Strategic Goals: Several senators noted after the briefing that the Trump administration failed to provide clear strategic objectives or timelines, with Senator Kelly remarking that 'they have no plan and no exit strategy,' further clouding the war's outlook.
- Market Reactions: Trump's statements previously led to a market surge and a significant drop in oil prices, yet Democrats warn that the ongoing conflict could lead to renewed market fluctuations, particularly as the security situation in the Strait of Hormuz remains precarious, affecting global oil prices and economic stability.
See More
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- Geopolitical Impact: Crude oil prices are rising due to escalating tensions between Iran and Israel, yet the largest U.S. energy ETF has shown little movement, reflecting the complex dynamics in energy markets during geopolitical shocks.
- Investor Sentiment: Investors typically perceive oil rallies amid geopolitical events as a 'risk premium,' leading to a cautious approach towards energy equities, especially in high uncertainty scenarios.
- ETF Structure Influence: The ETF's top ten holdings account for over three-quarters of its portfolio, meaning that the performance of a few mega-cap companies can significantly sway the ETF's overall performance, resulting in energy stocks not reacting as expected to the oil price surge.
- Market Divergence: The current divergence in market reactions has sparked a broader debate among investors regarding whether oil price rallies indicate a long-term shift in energy markets or are merely a short-term geopolitical shock.
See More
